CONSTRUCTION & Material Supply Inc. should sue the CNMI government or the Department of Public Lands secretary instead of Saipan Mayor Ramon “RB” Camacho, his attorney Michael Evangelista said.
Evangelista is asking the Superior Court to dismiss the lawsuit, which seeks a total of $36,126.25 in unpaid quarry fees.
“The court lacks subject matter jurisdiction over this dispute. Even if the court finds that it has subject matter jurisdiction, plaintiff’s complaint fails to state a claim on which relief can be granted against defendants,” Evangelista said in a 13-page motion.
He said the municipality of Saipan is not a chartered municipality subject to a suit.
Citing a previous ruling, United States v. Borja, Evangelista said it only held that the Municipality of Tinian is a lawful entity that can be sued.
“And while its analysis applies equally to the Municipality of Rota, it does not apply to Saipan,” he added.
“There presently are only two chartered municipalities in the CNMI: the Municipality of Tinian and Aguiguan, and the Municipality of Rota. Saipan is not a chartered municipality able to sue and be sued,” Evangelista said.
“Mayor RB Camacho cannot be sued for damages in his official capacity,” he added.
“Instead of suing Mayor RB and the Municipality of Saipan, Plaintiff should be suing the Commonwealth or the Secretary of Public Lands, or both. Instead of seeking money from Mayor RB and the Municipality of Saipan, Plaintiff should be suing the Secretary of Public Lands to enforce plaintiff’s rights under the public benefit provision of the Temporary Occupancy Agreement against the Secretary of Public Lands. And if Plaintiff is seeking a monetary judgment to be paid out of the CNMI Treasury, it needs to sue the Commonwealth and serve the Attorney General,” Evangelista said.
He added: “The Office of the Mayor of Saipan or the Municipality of Saipan have no treasury of their own. All debts and obligations of the mayor and the municipality are paid out of the Commonwealth Treasury in accordance with Commonwealth laws and are not governed by any municipal ordinance or local law. Accordingly, any suit for payment of money damages needs to be brought against the Commonwealth and defended by the Attorney General.”
Evangelista said “the crux” of the dispute between CMS and Camacho and the Saipan municipality is the public benefit provision of the quarry operating permit: Section 11 of the Temporary Occupancy Agreement.
The public benefit provision reads as follows:
“With the prior written consent of the DPL, CNMI government agencies shall be exempted from paying any charges for quarry materials extracted from the quarry site operated by Permittee under a valid permit. Permittee shall be exempted from paying royalty fees for the amount of quarry materials supplied to the government. However, it shall be the responsibility of the Permittee to keep detailed records of any and all quarry materials provided to the government. This detailed record shall be submitted as a separate report from the royalty report required to be submitted by the Permittee, but must be submitted on the same due date as required by the Permittee.”
According to Evangelista, “Section 11 clearly makes the Mayor of Saipan, together with the Saipan Municipality and the people of Saipan, intended third-party beneficiaries of the temporary occupancy agreement which, likewise, indisputably constitutes a contract between plaintiff and the DPL.”
As such, the lawyer said, the rights of the mayor and the municipality cannot be diminished by agreement between DPL and plaintiff, much less by DPL unilaterally.
“Plaintiff should be suing the Secretary of DPL to enforce Section 11 as written, so that it can obtain from DPL the consideration therein prescribed for quarry materials furnished to government agencies, rather than pursuing a baseless claim against Mayor RB and Saipan Municipality for monetary compensation barred by Section 11,” Evangelista reiterated.
He said the complaint relies on a letter issued by the secretary of the Department of Public Lands “purporting to condition and limit Mayor RB’s access to quarry materials under the public benefit provision.”
But Evangelista said the “public benefit provision itself reserves no such authority in the DPL Secretary. The Office of the Mayor of Saipan and the Municipality of Saipan are intended third-party beneficiaries of the public benefit provision. The public benefit provision is part of the consideration for the Commonwealth’s grant of quarry privileges to plaintiff, as the permit, or Temporary Occupancy Agreement, is a contract between Plaintiff and DPL.”
He said it is “clear from the language of Section 11 of the TOA that the only consideration Plaintiff is entitled to receive for the public benefit provision is exemption from paying the quarry royalty that would otherwise be due on the quarry materials supplied to a governmental agency such as the Office of the Mayor of Saipan.” Accordingly, “the DPL Secretary had no authority to alter the terms of the contract and diminish the amount of public benefit reserved to Mayor RB and other government agencies except as authorized by Commonwealth law,” Evangelista said.
He said the claim or complaint was not presented to the AG first as required by law, and that “there is no valid and binding contract between Plaintiff and Defendants.”
The complaint arises from unpaid invoices for quarry products provided by CMS to the mayor’s office.
According to the lawsuit, from Feb. 1 to Sept. 11, 2023, the mayor’s office obtained 7.5 cubic yards of “aggregates-3/8” material and 1,310 cubic yards of “base course” at the CMS Kannat Tabla quarry.
CMS said when it was providing quarry materials to the mayor’s office, it likewise provided monthly invoices, which stated that “the customer agrees to pay the invoice to CMS, with each overdue invoice charged at 1.5% per month.” In addition, the invoices stated that the customer is responsible for attorney and collection fees in case of default.
CMS said despite the invoices, the mayor’s office of Saipan has “failed to pay and continues to fail or refuses to pay CMS….”
CMS stated that it “applied a 120-cubic-yard credit to the total base course material obtained by the Saipan municipality.”
Under its temporary occupancy agreement with the Department of Public Lands, CMS is obligated to provide 100 cubic yards of base course to government agencies for “public benefit.” In the case of the mayor’s office of Saipan, the quarry materials are used to repair roads.
In its complaint, CMS stated that the mayor’s office obtained 1,310 cubic yards of base course at $30.50 per cubic yard.
